Most of my blogs during the past year have discussed various aspects of customer loyalty. Some of the topics I have covered include: customer satisfaction; how to achieve effective customer relations; customer satisfaction versus customer loyalty; conflicts and issues relevant to customer loyalty; a prescription for building customer partnerships; employees as internal customers and resources; the link between employee morale; and customer loyalty.
In order to build a loyalty-based customer service operation, all aspects of a company must be integrated cohesively so each area contributes directly or indirectly to quality, customer satisfaction and continued customer loyalty.
The following checklist identifies four critical areas that must be aligned in order to develop and sustain devoted customer partnerships.
Respond to each statement using a rating of:
O=not at all, l=minimally, 2=moderately or 3=significantly
CUSTOMERS
A. Identify homogenous customer segments and determine the kinds of customers to whom you can deliver superior value. _____
B. Understand your target customers and, determine specifically how you are going to keep them. _____
C. Identify specifically which, where and how often customer expectations have been met, or not. Remember, what ever the customer says is a problem, is a problem! _____
D. Determine accurately your company’s ability and willingness to handle customer complaints and inquires effectively. Identify specific procedures. _____
E. Determine accurately the extent to which your recovery process reduces defections or retains customers who might other wise switch to the competition. _____
F. Identify the percentage of your customer base at risk. _____
G. Maintain programs to ensure customer retention throughout the product or service lifecycle. _____
H. Establish multiple levels of, and vehicles and opportunities for, interactive communication with your customers (do you have specific examples?) ____
I. Articulate specific examples of how your company earns the personal trust, respect and devotion of each customer. _____
J. Assess the meaningful reciprocal allegiance between your company and your customers and describe specific ways in which each feels and demonstrates some obligation to the other. _____
PRODUCTS AND SERVICES
A. Add new products and services based on your customers’ changing needs and desires. Cite specific examples. _____
B. Anticipate evolving customer needs and wishes and then make wise intuitive market judgments based on accurate intelligence-gathering and analysis. Describe the proactive process. _____
C. Scrutinize your products and services from the perspective of the customer’s expectations, on a regular and ongoing basis, to determine the variance or gap between expectations and _____
D. Keep customers actively involved throughout the product or service lifecycle. _____
EMPLOYEES
A. Understand and state clearly the shared purpose between the company and the employee. ____
B. Employees have integrated the company purpose and standards into their work life. How do you know? _____
C. Ensure management decisions and behaviors are congruent with the stated vision and goals of the company. _____
D. Design operating structures and incentives to empower front-line staff to take the initiative to delight your customers _____
E. Implement an effective retention strategy aligning employees’ enlightened self-interest with the company’s interests. _____
F. Ensure every employee understands thoroughly their personal contribution, their roles and responsibilities, in the overall activities of the company. _____
G. Articulate specific examples of how the company earns the trust, respect and confidence of its employees. ____
MEASUREMENT SYSTEMS
A. Determine the actual cash flow consequences of changes in customer loyalty, defections and losses of target customers. ____
B. Determine the financial impact of poor quality and specific customer problems. ____
C. Set quality priorities based on market revenue impact. ____
D. Measure each priority area accurately and continuously. ____
E. Review the results regularly with top management. ____
F. Calculate the market impact of quality and service to determine the profit value of a customer. ____
G. Identify the number of customers experiencing problems. ____
H. Determine percentage of customers having problems. ____
I. Find the impact of specific problems on customer loyalty. ____
J. Assess the specific impact of service systems on loyalty. ____
K. Determine the actual financial payoff for problem prevention. ____
THE FINAL ASSESSMENT
First review your scores by section to determine categories of strength and/ or weakness. If your ratings overall fall within the two to three range, congratulations!
Otherwise, you may want to get more directly involved with specific problem areas.
Remember, this abbreviated check list encompasses a broad range of issues relative to customers and service which I have discussed throughout the year. You also may want to refer to previous blogs for more comprehensive coverage of specific situations and solutions.
The benefits of quantifying the bottom-line impact of customer loyalty should be self-evident. It allows you to identify and prioritize the problems based on accurate assessment, implement specific solutions for each problem, then measure the results constantly.
Top management must be an integral participant and committed to achieving customer-focused business partnerships. Take subsequent action based on the outcomes and require performance accountability.
Finally, don’t forget to communicate effectively and often with every one involved.
Monday, April 14, 2008
Monday, April 7, 2008
Corporate Culture and Customer Loyalty
I’d like to take a break and discuss a topic that had never occurred to me. The concept had crossed my mind but never really “grabbed me.” The concept? Customer organization and corporate culture can and does play a real role in customer satisfaction and loyalty.
Since its news to me, I am taking some time to write it to be sure I understand it. I recently visited a company in the southeastern United States and met its president. We chatted about the company’s strategic direction and its mission of building long-term customer relationships. I was encouraged to hear this, and when he said they have re- engineered their company, I became even more interested.
In essence, this company has chosen to work with customers on a team basis. Each customer (at least the larger customers) has a project team assigned to them. The team works with the customer and finds comparable members in the customer’s company.
Each team has a project leader responsible for coordinating all its activities and assuring customer requirements are met. This means every aspect of the business, including the accounting end of the relationship. Here’s where it gets interesting.
The keen insight now dawning on me came from a statement by the president that not all customers worked well with the team concept. He explained some customer organizations come with a team to work on the project. These customers have taken on a corporate culture of a flatter organization with fewer levels of hierarchy and greater responsibility and authority given to individuals at the working level.
These individuals make decisions and fix problems without the need of “corporate approvals for minor changes and corrections always present during the start-up and operation of business relationships between two corporate entities. Thus, the operation moves quickly and efficiently, usually at minimum cost.
The other extreme of customers has the corporate hierarchical structure of the ‘50s, where there are few in authority to make decisions and many to do the work directed by the organizational structure. The corporate bureaucracy acts as an inhibitor to the team process by imposing the hierarchical decision-making process on the team.
Because each decision requires approval from the few executives at the top of the hierarchical structure, decisions take more time. Hence, the project (or customer operation) is impeded.
But what is the impact of working with the flat team approach as opposed to the rigid hierarchical style resembling a pyramid? In both extremes of corporate culture, there is a customer impact when an outside company attempts to do business with them. Customer satisfaction measurement can be made for both types of companies. How about when the two extremes interact with an external service company?
For a rigid hierarchical company, the external service organization will be selected by the management decision makers. The level of satisfaction provided to the customer company will probably be perceived differently at the operations level than at the management decision-making level.
The primary reason for the difference in perceived satisfaction is the likelihood of communications discrepancies between the levels of management. When problems arise at the operation level, they will be communicated to the management level. When the problems are resolved, the resolution also will be communicated in some manner to management.
Unfortunately, communication between levels of management is troublesome at its best. Personalities play an important role and communications are sometimes distorted for reasons other than the good of the company. In this case, customer satisfaction may have dramatically different measures depending on who is asked. In fact, the operations personnel may be satisfied at the same time management is dissatisfied with the same service company. The most likely reason is management was informed of problems, but has not yet been made aware of the solutions.
When it is apparent the company structure is rigidly hierarchical, the service organization must communicate at both the operations level and the management level.
For this type of company, customer satisfaction at the operations level does not constitute loyalty, and measurements taken at the operations level may be misleading in terms of vulnerability to competitive actions.
In a distributed management company, the service company will be selected by the decision makers at the operations level. The higher levels of company management may not even be aware of the company providing service. Those involved with the decision to select the service provider will use the service as well. They also are the people who will become loyal to the service provider and, hence, the ones on which to focus. Unlike the rigid hierarchical structure where communication can be a critical factor in satisfaction with the service provider, the communication links are short because decision and operation are within the same organizational level.
The customer satisfaction measurement can be misleading with this organization as well as with the rigid hierarchical structured organization. Higher levels of management may have no clue to the satisfaction level provided by the service provider, and any attempt to measure their understanding will probably be misleading at best.
When a company is seen to have distributed management, the major effort for building loyalty and customer satisfaction should be aimed at the operations level. Although higher levels of management should not be ignored, their influence in the decision-making process will be limited.
Customer satisfaction is generally thought of as the result of the delivery of products and services meeting or exceeding the customer requirements. This concept must be modified to accept the new understanding (new for me) of what a significant role the corporate culture and management structure of the customer can play.
Although this concept of corporate culture having an effect on customer satisfaction has been known to many, few of us have taken the time to understand the implications of the different types of companies we deal with daily.
Corporate cultures are changing more today than ever in the recent past. Some companies call the changes re-engineering, others call the changes rightsizing.
Whatever the name, the way companies do business today and tomorrow will be different than the past. In order to be successful, and have satisfied customers who become loyal, corporate culture must be a strong consideration when deciding the customer strategy to use.
The bottom line is that measures of customer satisfaction and loyalty can be dramatically distorted by the customer organization.
Since its news to me, I am taking some time to write it to be sure I understand it. I recently visited a company in the southeastern United States and met its president. We chatted about the company’s strategic direction and its mission of building long-term customer relationships. I was encouraged to hear this, and when he said they have re- engineered their company, I became even more interested.
In essence, this company has chosen to work with customers on a team basis. Each customer (at least the larger customers) has a project team assigned to them. The team works with the customer and finds comparable members in the customer’s company.
Each team has a project leader responsible for coordinating all its activities and assuring customer requirements are met. This means every aspect of the business, including the accounting end of the relationship. Here’s where it gets interesting.
The keen insight now dawning on me came from a statement by the president that not all customers worked well with the team concept. He explained some customer organizations come with a team to work on the project. These customers have taken on a corporate culture of a flatter organization with fewer levels of hierarchy and greater responsibility and authority given to individuals at the working level.
These individuals make decisions and fix problems without the need of “corporate approvals for minor changes and corrections always present during the start-up and operation of business relationships between two corporate entities. Thus, the operation moves quickly and efficiently, usually at minimum cost.
The other extreme of customers has the corporate hierarchical structure of the ‘50s, where there are few in authority to make decisions and many to do the work directed by the organizational structure. The corporate bureaucracy acts as an inhibitor to the team process by imposing the hierarchical decision-making process on the team.
Because each decision requires approval from the few executives at the top of the hierarchical structure, decisions take more time. Hence, the project (or customer operation) is impeded.
But what is the impact of working with the flat team approach as opposed to the rigid hierarchical style resembling a pyramid? In both extremes of corporate culture, there is a customer impact when an outside company attempts to do business with them. Customer satisfaction measurement can be made for both types of companies. How about when the two extremes interact with an external service company?
For a rigid hierarchical company, the external service organization will be selected by the management decision makers. The level of satisfaction provided to the customer company will probably be perceived differently at the operations level than at the management decision-making level.
The primary reason for the difference in perceived satisfaction is the likelihood of communications discrepancies between the levels of management. When problems arise at the operation level, they will be communicated to the management level. When the problems are resolved, the resolution also will be communicated in some manner to management.
Unfortunately, communication between levels of management is troublesome at its best. Personalities play an important role and communications are sometimes distorted for reasons other than the good of the company. In this case, customer satisfaction may have dramatically different measures depending on who is asked. In fact, the operations personnel may be satisfied at the same time management is dissatisfied with the same service company. The most likely reason is management was informed of problems, but has not yet been made aware of the solutions.
When it is apparent the company structure is rigidly hierarchical, the service organization must communicate at both the operations level and the management level.
For this type of company, customer satisfaction at the operations level does not constitute loyalty, and measurements taken at the operations level may be misleading in terms of vulnerability to competitive actions.
In a distributed management company, the service company will be selected by the decision makers at the operations level. The higher levels of company management may not even be aware of the company providing service. Those involved with the decision to select the service provider will use the service as well. They also are the people who will become loyal to the service provider and, hence, the ones on which to focus. Unlike the rigid hierarchical structure where communication can be a critical factor in satisfaction with the service provider, the communication links are short because decision and operation are within the same organizational level.
The customer satisfaction measurement can be misleading with this organization as well as with the rigid hierarchical structured organization. Higher levels of management may have no clue to the satisfaction level provided by the service provider, and any attempt to measure their understanding will probably be misleading at best.
When a company is seen to have distributed management, the major effort for building loyalty and customer satisfaction should be aimed at the operations level. Although higher levels of management should not be ignored, their influence in the decision-making process will be limited.
Customer satisfaction is generally thought of as the result of the delivery of products and services meeting or exceeding the customer requirements. This concept must be modified to accept the new understanding (new for me) of what a significant role the corporate culture and management structure of the customer can play.
Although this concept of corporate culture having an effect on customer satisfaction has been known to many, few of us have taken the time to understand the implications of the different types of companies we deal with daily.
Corporate cultures are changing more today than ever in the recent past. Some companies call the changes re-engineering, others call the changes rightsizing.
Whatever the name, the way companies do business today and tomorrow will be different than the past. In order to be successful, and have satisfied customers who become loyal, corporate culture must be a strong consideration when deciding the customer strategy to use.
The bottom line is that measures of customer satisfaction and loyalty can be dramatically distorted by the customer organization.
Saturday, April 5, 2008
Making Partnership the Prescription
The existence of a business is tied to bottom-line results. Successful companies understand customers are the reason they are in business and customer loyalty pays big dividends. Companies also know the importance of paving attention to and caring genuinely about the customer.
What many companies fail to acknowledge is they absolutely need dedicated employees to partner with their customers. Employee devotion grows in time as employees decide to trust the company, feel respected, valued and supported. Then they can become excited about their work and their contribution.
Employee dedication provides the genesis of customer partnering. A relationship starts with an encounter, moves through experiences, then proceeds to enjoyment. Then, somewhere along the way, the relationship reaches partnership status.
Respect and trust are essential in the journey. Respect originates with admiration, esteem and honor. Trust emanates from a firm belief in the reliability and honesty of a person.
You can earn employee devotion through consistent, congruent behavior in time within a context of fairness and truthfulness in the following ways:
1. Communicate corporate values clearly, and then incorporate them as genuine and consistent guiding principles in all organizational practices. Values are the beliefs and convictions guiding individual behavior and supporting the corporate vision.
2. Demonstrate respect for people throughout all levels of the company in dealing with every situation. This is known as “walking the talk.” When discrepancies between stated values and accepted behavior occur, then respect and trust are diminished or lost.
3. Convey positive attitudes and demonstrate positive behaviors — they are highly contagious. Competent people who feel valued have the energy necessary to deal with any situation. Focus on the positive and provide constructive, accurate feedback about areas needing improvement.
4. Disclose information and share resources in response to employee and customer needs. Help your employees serve customers. Removing the mystery is a powerful technique for building trust.
Trust derives from a gradual process of experiences where promises are kept, expectations are met and truth is told. People come to feel comfortable and to trust in such good intentions.To build trust with employees, you must tell the truth, deal with reality and keep agreements.
Everyday your ethical conduct demonstrates the company’s commitment to stated values and thus earns employees’ trust and devotion. Truth provides a base upon which to build. A good leader serves employees by creating a supportive environment in which they can contribute their best through commitment, initiative to solve problems, experimentation, and willingness to fail.
Stephen R. Covey, author of “Principle-Centered Leadership.” suggests the “ultimate test of principle-centered leadership is to be loyal to people who are absent when their name comes up in conversations and meetings.”
In most companies employees and executives do not trust one another. Each assumes the other operates from a position of self-interest and expects to prevail at another’s expense. Such negative assumptions promote self-protective, aggressive and suspicious behaviors. These, of course, reinforce the negative assumptions. Intentional, self-serving manipulative behavior creates a destructive, relentless circular trap strangling creativity and spontaneity and precluding trust.
In a contaminated corporate culture both executives and employees fail to take personal responsibility for their behavior. Instead, each blames, makes excuses withholds information, undermines, sabotages and discredits the efforts of others.
Withholding information is a sophisticated form of lying and manipulating. Tainted organizations habituate to mistrust, cynicism and fear. Unsatisfying relationships and environments become the status quo.
One employee’s bad attitude can contaminate a customer relationship and sow seeds of doubt about the company’s credibility. Repeated negative encounters can jeopardize goodwill. While a devoted customer partner ship can weather a storm and survive some inconsistencies, a recurrent pattern of interactions with unenthusiastic, indifferent employees sends a cautionary signal to even loyal customers.
Companies need caring employees who will do what is required for the customer and the company rather than what is rewarded. Each contribution to the partnership (company and employee as well as employee and customer) creates the opportunity for growth and prosperity.
Superior service is not conditional. It thrives when there is no expectation or requirement of a response in kind. Employees need the freedom to operate with a reservoir of energy, resources and trust in order to delight customers, solve problems creatively and effectively, and have a gift-giving attitude.
Employees will not divest themselves of their protective masks and personas without a kind of safety net — a corporate environment promoting genuine caring, authentic goodwill, bona fide respect and fairness for all persons. Mask removal occurs when employees feel positive enough about themselves and the company to trust in your honorable intentions.
Employees want to know if they are willing to risk, then they will receive authenticity, fairness, respect and truth in return. When the customer perceives an employee disingenuousness or artificiality, a mask, they conclude there must be a problem to hide or disguise. People who cheat, lie and deceive in relationships communicate their inferior view of themselves and do not feel worthy of other people’s trust.
They act distrustful and full of doubt; self-doubt breeds distrust. John Whiteside, Ph.D. offered words of wisdom in the July 1994 Executive Excellence:
“To build a culture of trust, speak the words of trust then act as if your word is your bond. Offer trust freely at the out set of a project, as a gift an expectation; not as a reward for past achievements nor withheld as a punishment for failure."
The luxury of self-righteous mistrust is far too costly for any business to afford in a world where cooperation and creative interdependency of people provide the competitive edge that companies need to survive. Absent trust, cooperation and teamwork wither.
Listening without contact, without authentic emotional connection, is like looking without seeing. When trust is broken or lost, listening is critical to mending fences and healing wounds. This does not mean corresponding. Listening to the customer or another employee means being actively engaged in the process of seeking to understand the other person. It means one must take time to hear without becoming defensive.
Listening is not just what you do; it is about what the other person experiences. It means being willing to make a change, admit mistakes, then make amends. Partners expect you to work diligently at listening and to respond as though their communication matters and is important to you. What percentage of your listening is passive, indirect and rational? What percent is active, direct and emotional? Partnership listening is about genuine contact and connection.
According to Ted Levitt in Oct. 1993 “One of the surest signs of a bad or declining relationship with a customer is the absence of complaints. Either the customer is not being candid or not being contacted.” He further asserts. “The absence of candor reflects the decline of trust and deterioration of the relationship.”
Customers asked directly for feed back are much more likely to give favorable comments than those not queried. Also, customers with a service problem who have had it corrected spectacularly are more loyal than those who have never had a problem.
The process of building a relation ship includes mutual risk-taking and the courage to ask for, receive and give honest feedback without defensiveness. Truth-telling may result in a few bruises or uncomfortable moments, but truth always leaves partners feeling stronger and better because they know where they stand with each other.
False agreement threatens partnerships much more than honest conflict or disagreement. Then, as candor motivates improvement, those who change feel responsible, those served feel understood, and the partnership is strengthened.
Employees feeling respected, important and trusted will more likely demonstrate confidence and competence when serving customers.
A partnership attitude derives from trust. It has a magnetic effect on customers because it conveys a kind of unconditional positive regard. Customers feel valued, not used. Just as customers don’t expect you to be perfect, neither do employees expect perfection. Employees just expect the company to demonstrate it cares enough to strive to improve. When you are trustworthy, employees reciprocate by investing themselves by offering feedback and suggestions and making personal commitments which may never be seen by management.
Employees act like grown-ups when treated like grown-ups. The have the wisdom and maturity to solve problems. The challenge for management is inspiring them to have the willingness and desire to contribute and collaborate. Employees will contribute if they believe they are appreciated.
Equality and partnership requires an investment of energy, trust and mutual participation. Service companies failing to treat their employees as equals will never earn the depth of commitment partnership implies and requires.
Employees are a company’s most important customers. The will give your customers the same quality of service they receive from management. Consequently the values you live are the values employees believe you honor.
If your employees watched where you invested your energy for a week, what would they conclude is your top priority? Leaders must live consistent with the values they espouse, especially in difficult situations.
Jan Carizon, past CEO of Scandinavian Airlines (SAS), said it best: “If you aren’t serving the customer, your job is to be serving someone who is.”
What many companies fail to acknowledge is they absolutely need dedicated employees to partner with their customers. Employee devotion grows in time as employees decide to trust the company, feel respected, valued and supported. Then they can become excited about their work and their contribution.
Employee dedication provides the genesis of customer partnering. A relationship starts with an encounter, moves through experiences, then proceeds to enjoyment. Then, somewhere along the way, the relationship reaches partnership status.
Respect and trust are essential in the journey. Respect originates with admiration, esteem and honor. Trust emanates from a firm belief in the reliability and honesty of a person.
You can earn employee devotion through consistent, congruent behavior in time within a context of fairness and truthfulness in the following ways:
1. Communicate corporate values clearly, and then incorporate them as genuine and consistent guiding principles in all organizational practices. Values are the beliefs and convictions guiding individual behavior and supporting the corporate vision.
2. Demonstrate respect for people throughout all levels of the company in dealing with every situation. This is known as “walking the talk.” When discrepancies between stated values and accepted behavior occur, then respect and trust are diminished or lost.
3. Convey positive attitudes and demonstrate positive behaviors — they are highly contagious. Competent people who feel valued have the energy necessary to deal with any situation. Focus on the positive and provide constructive, accurate feedback about areas needing improvement.
4. Disclose information and share resources in response to employee and customer needs. Help your employees serve customers. Removing the mystery is a powerful technique for building trust.
Trust derives from a gradual process of experiences where promises are kept, expectations are met and truth is told. People come to feel comfortable and to trust in such good intentions.To build trust with employees, you must tell the truth, deal with reality and keep agreements.
Everyday your ethical conduct demonstrates the company’s commitment to stated values and thus earns employees’ trust and devotion. Truth provides a base upon which to build. A good leader serves employees by creating a supportive environment in which they can contribute their best through commitment, initiative to solve problems, experimentation, and willingness to fail.
Stephen R. Covey, author of “Principle-Centered Leadership.” suggests the “ultimate test of principle-centered leadership is to be loyal to people who are absent when their name comes up in conversations and meetings.”
In most companies employees and executives do not trust one another. Each assumes the other operates from a position of self-interest and expects to prevail at another’s expense. Such negative assumptions promote self-protective, aggressive and suspicious behaviors. These, of course, reinforce the negative assumptions. Intentional, self-serving manipulative behavior creates a destructive, relentless circular trap strangling creativity and spontaneity and precluding trust.
In a contaminated corporate culture both executives and employees fail to take personal responsibility for their behavior. Instead, each blames, makes excuses withholds information, undermines, sabotages and discredits the efforts of others.
Withholding information is a sophisticated form of lying and manipulating. Tainted organizations habituate to mistrust, cynicism and fear. Unsatisfying relationships and environments become the status quo.
One employee’s bad attitude can contaminate a customer relationship and sow seeds of doubt about the company’s credibility. Repeated negative encounters can jeopardize goodwill. While a devoted customer partner ship can weather a storm and survive some inconsistencies, a recurrent pattern of interactions with unenthusiastic, indifferent employees sends a cautionary signal to even loyal customers.
Companies need caring employees who will do what is required for the customer and the company rather than what is rewarded. Each contribution to the partnership (company and employee as well as employee and customer) creates the opportunity for growth and prosperity.
Superior service is not conditional. It thrives when there is no expectation or requirement of a response in kind. Employees need the freedom to operate with a reservoir of energy, resources and trust in order to delight customers, solve problems creatively and effectively, and have a gift-giving attitude.
Employees will not divest themselves of their protective masks and personas without a kind of safety net — a corporate environment promoting genuine caring, authentic goodwill, bona fide respect and fairness for all persons. Mask removal occurs when employees feel positive enough about themselves and the company to trust in your honorable intentions.
Employees want to know if they are willing to risk, then they will receive authenticity, fairness, respect and truth in return. When the customer perceives an employee disingenuousness or artificiality, a mask, they conclude there must be a problem to hide or disguise. People who cheat, lie and deceive in relationships communicate their inferior view of themselves and do not feel worthy of other people’s trust.
They act distrustful and full of doubt; self-doubt breeds distrust. John Whiteside, Ph.D. offered words of wisdom in the July 1994 Executive Excellence:
“To build a culture of trust, speak the words of trust then act as if your word is your bond. Offer trust freely at the out set of a project, as a gift an expectation; not as a reward for past achievements nor withheld as a punishment for failure."
The luxury of self-righteous mistrust is far too costly for any business to afford in a world where cooperation and creative interdependency of people provide the competitive edge that companies need to survive. Absent trust, cooperation and teamwork wither.
Listening without contact, without authentic emotional connection, is like looking without seeing. When trust is broken or lost, listening is critical to mending fences and healing wounds. This does not mean corresponding. Listening to the customer or another employee means being actively engaged in the process of seeking to understand the other person. It means one must take time to hear without becoming defensive.
Listening is not just what you do; it is about what the other person experiences. It means being willing to make a change, admit mistakes, then make amends. Partners expect you to work diligently at listening and to respond as though their communication matters and is important to you. What percentage of your listening is passive, indirect and rational? What percent is active, direct and emotional? Partnership listening is about genuine contact and connection.
According to Ted Levitt in Oct. 1993 “One of the surest signs of a bad or declining relationship with a customer is the absence of complaints. Either the customer is not being candid or not being contacted.” He further asserts. “The absence of candor reflects the decline of trust and deterioration of the relationship.”
Customers asked directly for feed back are much more likely to give favorable comments than those not queried. Also, customers with a service problem who have had it corrected spectacularly are more loyal than those who have never had a problem.
The process of building a relation ship includes mutual risk-taking and the courage to ask for, receive and give honest feedback without defensiveness. Truth-telling may result in a few bruises or uncomfortable moments, but truth always leaves partners feeling stronger and better because they know where they stand with each other.
False agreement threatens partnerships much more than honest conflict or disagreement. Then, as candor motivates improvement, those who change feel responsible, those served feel understood, and the partnership is strengthened.
Employees feeling respected, important and trusted will more likely demonstrate confidence and competence when serving customers.
A partnership attitude derives from trust. It has a magnetic effect on customers because it conveys a kind of unconditional positive regard. Customers feel valued, not used. Just as customers don’t expect you to be perfect, neither do employees expect perfection. Employees just expect the company to demonstrate it cares enough to strive to improve. When you are trustworthy, employees reciprocate by investing themselves by offering feedback and suggestions and making personal commitments which may never be seen by management.
Employees act like grown-ups when treated like grown-ups. The have the wisdom and maturity to solve problems. The challenge for management is inspiring them to have the willingness and desire to contribute and collaborate. Employees will contribute if they believe they are appreciated.
Equality and partnership requires an investment of energy, trust and mutual participation. Service companies failing to treat their employees as equals will never earn the depth of commitment partnership implies and requires.
Employees are a company’s most important customers. The will give your customers the same quality of service they receive from management. Consequently the values you live are the values employees believe you honor.
If your employees watched where you invested your energy for a week, what would they conclude is your top priority? Leaders must live consistent with the values they espouse, especially in difficult situations.
Jan Carizon, past CEO of Scandinavian Airlines (SAS), said it best: “If you aren’t serving the customer, your job is to be serving someone who is.”
Friday, April 4, 2008
Customer Partnership: Conflicts and Issues
Because people develop relationships with other people, do you fear your business may be in jeopardy if your customers feel more loyalty toward a few terrific employees than your company?
A significant aspect of devoted relationships is they are personal in nature. How, then, does a customer build a personal relationship with a company? Or vice versa? Can a customer bond with an entity rather than a person? It may seem an oxymoron because loyal partnerships require reciprocity, mutual investment and benefit, and connected interactive communication through time.
When we delve more deeply into the word relationship, we find the concept of relatedness. It refers to connectedness, or kinship, and what one person or thing has to do with another.
We also discover relationship refers to the feeling existing between persons or things. Thus, even though an inanimate object does not reciprocate a person’s feelings, the importance of the experience is understood.
There are multitudes of ways persons derive value from non-human relationships — appreciation of beauty, inspiration from art, literature or music, solace from nature, and physical protection from structures.
People do not connect with or relate to something vague or contradictory. Because a company has a unique personality, regardless of its size or scope, wise management identifies, articulates and cultivates a distinct identity embodied by its business, vision, mission and priorities. That is the corporate profile.
A company can position itself within any arena, from a town to a continent, in order to speak effectively to and serve its universe of customers.
Most companies have several different types of customers, each with its own needs for service. Not all customer contacts for instance, need to be partnerships. Functional, fast, friendly service may suffice and be completely appropriate; e.g. Fed Ex. But this blog speaks to those more complex and demanding customer interactions and partnerships that must be developed in time and require commitment and care to flourish.
Chip Bell, in his book, “Customers as Partners,” defines a customer partnership:
“It starts with a deep and assertively demonstrated respect for the customer, moves with the spirit of contribution and ends with the joy of knowing the best possible has been done to meet or exceed a need.”
A good partnership can yield such a different quality of experience that we want more and more. Great partnerships reflect the best of our attitudes, abilities and dreams.
When partnering succeeds, satisfied customers become champions who advocate enthusiastically for your company.
Devoted customers become an extension of your sales and marketing efforts and contribute actively to your success. In today’s competitive business climate, this is particularly important because, as we now know, customer satisfaction does not guarantee customer retention.
A retention marketing strategy is far superior to acquisition tactics because loyal customers spend more money each year they stay with you. Wise companies focus on the substance of a customer partnership rather than on a single transaction.
The delivery of superior customer service requires depth, spirit and heart from employees imbued with superior customer service and partnership attitudes. Dedicated employees never act tired or bored, are always responsive to customers and colleagues, and are eager to please. When a customer has a problem, the employee must know to fix the customer first, and THEN fix the customer’s problem. Superior service should be respectful and confident, never deferential.
The long-term nature of a partnership derives from the special relationship existing when customers experience a committed connection concurrent with the service.
The experience of partnership does not require a relationship of long duration. It may arise spontaneously as a consequence of extraordinary service.
However, it is not possible to delight customers every time. While customer partnerships produce greater intrinsic satisfaction than traditional customer interactions, they also can be more for giving of mistakes and more economically rewarding.
Six core elements of powerful partnerships are described by Bell in his book:
1. Abundance is anchored in an attitude of generosity. The giver finds pleasure in extending the relationship beyond just meeting the need. Partners don’t keep score; they are non-competitive. The synergy of their combined efforts creates abundance.
2. Trust develops when partners feel confident and have a track record of fidelity. “Trust is a state of readiness for unguarded interaction with some one or something,” Bell writes. Difficult situations can be handled confidently and effectively with the net of trust beneath them.
3. Dreams enfold a vision of what the association could be and acknowledge the commitment required to take the relationship to a higher plane. Shared vision is the foundation strengthening joint purpose and individual contributions combining for mutual benefit.
4. Truth and candor are tools for growth. Interactions based on honesty coupled with straight talk, compassion and care nurture cleanness in associations. Truth honors authenticity and obliterates guilt and deceit.
5. Balance is a pursuit of equality seeking stability overtime. Balance embodies a quest for equity, fairness and fair play.
6. Grace grounds the partnership with a sense of familiarity and ease, peace and tranquility. An excellent partnership is artistic, more heart than head, more romantic than rational.
Employees are your internal customers. They must be excited about their work in order to remain loyal to your company, its mission and values, and deliver superior service to your customers.
Employees need to demonstrate their own integrity. They must take personal responsibility for knowing the truth and expressing it, taking initiative willingly and having the tenacity to solve problems in ways delighting customers without compromising the company or its business, and keeping the company’s best interests at heart.
Employees feeling respected. valued and supported will more likely manifest confidence and competence while serving your customers than those feeling indifferent. disconnected, maligned or used.
Delivery of dedicated service requires each employee be conscious, emotionally present. and connected with the people around them.
A critical challenge for companies is to earn devotion, build trust and create an environment cultivating employees’ ethical professional conduct.
Each customer contact represents either a step toward partnership (trust, customer satisfaction and loyalty) or a step toward disconnection (disappointment. aggravation and departure).
Each employee-customer contact creates an opportunity for outcomes ranging from delight to apathy. Companies caring deeply for customers strive to create a culture promoting superior service attitudes throughout the company, fostering customer partnerships resilient enough to weather the storms, and promoting an attitude of “we’ll figure out a way to do whatever you need.”
Responses such as ‘It’s against our policy” kill customer goodwill and partnership as well as employee spirit and devotion.
Customers don’t expect us to be perfect: they just expect us to demonstrate we care enough to strive to improve.
Good partnerships derive from repeatedly meeting the needs of each party in the relationship (company and employee) and creating opportunities for success.
Companies striving to create stewardship with their employees empower them to serve customers with confidence and a genuine spirit of good neighbors.
Devoted employees feel pride of ownership, share the company’s vision and contribute individually and collectively to achievement of common goals. Because great partnerships do reflect the best of our attitudes, abilities and dreams, they inspire a connection creating a dynamic enterprise.
Companies demonstrating their deep and abiding respect and trust for their employees and providing uncompromising support achieve a profoundly enduring partnership.
Devoted employees know their value to a company. They feel and demonstrate a profound sense of loyalty to the partnership.
Dedicated employees not only feel free to connect with and serve customers, they thrive on building those powerful partnerships. Loyal employees delight in contributing to the synergy of an endeavor bigger than an individual.
A final thought: when you can create a partnership with a customer you are building a HUGE barrier that dramatically reduces the likelihood that you will lose that customer to a competitor.
A significant aspect of devoted relationships is they are personal in nature. How, then, does a customer build a personal relationship with a company? Or vice versa? Can a customer bond with an entity rather than a person? It may seem an oxymoron because loyal partnerships require reciprocity, mutual investment and benefit, and connected interactive communication through time.
When we delve more deeply into the word relationship, we find the concept of relatedness. It refers to connectedness, or kinship, and what one person or thing has to do with another.
We also discover relationship refers to the feeling existing between persons or things. Thus, even though an inanimate object does not reciprocate a person’s feelings, the importance of the experience is understood.
There are multitudes of ways persons derive value from non-human relationships — appreciation of beauty, inspiration from art, literature or music, solace from nature, and physical protection from structures.
People do not connect with or relate to something vague or contradictory. Because a company has a unique personality, regardless of its size or scope, wise management identifies, articulates and cultivates a distinct identity embodied by its business, vision, mission and priorities. That is the corporate profile.
A company can position itself within any arena, from a town to a continent, in order to speak effectively to and serve its universe of customers.
Most companies have several different types of customers, each with its own needs for service. Not all customer contacts for instance, need to be partnerships. Functional, fast, friendly service may suffice and be completely appropriate; e.g. Fed Ex. But this blog speaks to those more complex and demanding customer interactions and partnerships that must be developed in time and require commitment and care to flourish.
Chip Bell, in his book, “Customers as Partners,” defines a customer partnership:
“It starts with a deep and assertively demonstrated respect for the customer, moves with the spirit of contribution and ends with the joy of knowing the best possible has been done to meet or exceed a need.”
A good partnership can yield such a different quality of experience that we want more and more. Great partnerships reflect the best of our attitudes, abilities and dreams.
When partnering succeeds, satisfied customers become champions who advocate enthusiastically for your company.
Devoted customers become an extension of your sales and marketing efforts and contribute actively to your success. In today’s competitive business climate, this is particularly important because, as we now know, customer satisfaction does not guarantee customer retention.
A retention marketing strategy is far superior to acquisition tactics because loyal customers spend more money each year they stay with you. Wise companies focus on the substance of a customer partnership rather than on a single transaction.
The delivery of superior customer service requires depth, spirit and heart from employees imbued with superior customer service and partnership attitudes. Dedicated employees never act tired or bored, are always responsive to customers and colleagues, and are eager to please. When a customer has a problem, the employee must know to fix the customer first, and THEN fix the customer’s problem. Superior service should be respectful and confident, never deferential.
The long-term nature of a partnership derives from the special relationship existing when customers experience a committed connection concurrent with the service.
The experience of partnership does not require a relationship of long duration. It may arise spontaneously as a consequence of extraordinary service.
However, it is not possible to delight customers every time. While customer partnerships produce greater intrinsic satisfaction than traditional customer interactions, they also can be more for giving of mistakes and more economically rewarding.
Six core elements of powerful partnerships are described by Bell in his book:
1. Abundance is anchored in an attitude of generosity. The giver finds pleasure in extending the relationship beyond just meeting the need. Partners don’t keep score; they are non-competitive. The synergy of their combined efforts creates abundance.
2. Trust develops when partners feel confident and have a track record of fidelity. “Trust is a state of readiness for unguarded interaction with some one or something,” Bell writes. Difficult situations can be handled confidently and effectively with the net of trust beneath them.
3. Dreams enfold a vision of what the association could be and acknowledge the commitment required to take the relationship to a higher plane. Shared vision is the foundation strengthening joint purpose and individual contributions combining for mutual benefit.
4. Truth and candor are tools for growth. Interactions based on honesty coupled with straight talk, compassion and care nurture cleanness in associations. Truth honors authenticity and obliterates guilt and deceit.
5. Balance is a pursuit of equality seeking stability overtime. Balance embodies a quest for equity, fairness and fair play.
6. Grace grounds the partnership with a sense of familiarity and ease, peace and tranquility. An excellent partnership is artistic, more heart than head, more romantic than rational.
Employees are your internal customers. They must be excited about their work in order to remain loyal to your company, its mission and values, and deliver superior service to your customers.
Employees need to demonstrate their own integrity. They must take personal responsibility for knowing the truth and expressing it, taking initiative willingly and having the tenacity to solve problems in ways delighting customers without compromising the company or its business, and keeping the company’s best interests at heart.
Employees feeling respected. valued and supported will more likely manifest confidence and competence while serving your customers than those feeling indifferent. disconnected, maligned or used.
Delivery of dedicated service requires each employee be conscious, emotionally present. and connected with the people around them.
A critical challenge for companies is to earn devotion, build trust and create an environment cultivating employees’ ethical professional conduct.
Each customer contact represents either a step toward partnership (trust, customer satisfaction and loyalty) or a step toward disconnection (disappointment. aggravation and departure).
Each employee-customer contact creates an opportunity for outcomes ranging from delight to apathy. Companies caring deeply for customers strive to create a culture promoting superior service attitudes throughout the company, fostering customer partnerships resilient enough to weather the storms, and promoting an attitude of “we’ll figure out a way to do whatever you need.”
Responses such as ‘It’s against our policy” kill customer goodwill and partnership as well as employee spirit and devotion.
Customers don’t expect us to be perfect: they just expect us to demonstrate we care enough to strive to improve.
Good partnerships derive from repeatedly meeting the needs of each party in the relationship (company and employee) and creating opportunities for success.
Companies striving to create stewardship with their employees empower them to serve customers with confidence and a genuine spirit of good neighbors.
Devoted employees feel pride of ownership, share the company’s vision and contribute individually and collectively to achievement of common goals. Because great partnerships do reflect the best of our attitudes, abilities and dreams, they inspire a connection creating a dynamic enterprise.
Companies demonstrating their deep and abiding respect and trust for their employees and providing uncompromising support achieve a profoundly enduring partnership.
Devoted employees know their value to a company. They feel and demonstrate a profound sense of loyalty to the partnership.
Dedicated employees not only feel free to connect with and serve customers, they thrive on building those powerful partnerships. Loyal employees delight in contributing to the synergy of an endeavor bigger than an individual.
A final thought: when you can create a partnership with a customer you are building a HUGE barrier that dramatically reduces the likelihood that you will lose that customer to a competitor.
Monday, March 31, 2008
Just Some Statistics from the Web
I continue to scan the web for loyalty data or data that relates to customer loyalty. Since I have several excerpts on my desk with what appears to be well documented data, it is time to log them and get on with some more interesting aspects of customer loyalty.
1. From the Harvard Business Review - The average organization loses 50% of its customers every 5 years. The cost of replacing them can be six to seven times more expensive than winning them in the first place.
2. From ACcenture - 59% of people had actually stopped doing business with companies in the past year due to poor service (based ona survey of 3,500 consumers on five continents).
3. From an annual survey by the National Retail Federationi and IBM - 6% of retailers don't have anyset schedule at all in tracking customer satisfaction (based on a survey of 137 retail firms). Only 10% of retailers measure customer satisfaction on a weekly basis and only 8% do an annual survey.
4. Foresee Results measures online customer loyalty for retail web sites - In 2007 the aggregate customer satisfaction rating fell by 1.3% to 74%. The rating declined for nearly half of 40 online retail retailers due to higher consumer expections (according to Foresee CEO Larry Freed.
5. From Harris Interactive who polled 2,000 mobile phone users - 96% said they wouldn't hesitate to switch carriers to get a better experience. In fact, 72% had already made a switch due to a negative experience.
6. From Amdocs, a call center technology firm in their survey of 2,000 consumers in the US and Britain - four in five consumers were satisfied with their service levels, but one in three said they would switch to another carrier to get better services for mobile games, entertainment and ads.
The bottom line is that there are vast amounts of customer information on the web. There appears to be a consistent message in all the satistics that customers are important and those organizations who measure them and make them an important component of their strategy seem to perform better (financially) than those who do not. This message is pervasive in all industries (at least those industries that I have either worked in or found on the web).
1. From the Harvard Business Review - The average organization loses 50% of its customers every 5 years. The cost of replacing them can be six to seven times more expensive than winning them in the first place.
2. From ACcenture - 59% of people had actually stopped doing business with companies in the past year due to poor service (based ona survey of 3,500 consumers on five continents).
3. From an annual survey by the National Retail Federationi and IBM - 6% of retailers don't have anyset schedule at all in tracking customer satisfaction (based on a survey of 137 retail firms). Only 10% of retailers measure customer satisfaction on a weekly basis and only 8% do an annual survey.
4. Foresee Results measures online customer loyalty for retail web sites - In 2007 the aggregate customer satisfaction rating fell by 1.3% to 74%. The rating declined for nearly half of 40 online retail retailers due to higher consumer expections (according to Foresee CEO Larry Freed.
5. From Harris Interactive who polled 2,000 mobile phone users - 96% said they wouldn't hesitate to switch carriers to get a better experience. In fact, 72% had already made a switch due to a negative experience.
6. From Amdocs, a call center technology firm in their survey of 2,000 consumers in the US and Britain - four in five consumers were satisfied with their service levels, but one in three said they would switch to another carrier to get better services for mobile games, entertainment and ads.
The bottom line is that there are vast amounts of customer information on the web. There appears to be a consistent message in all the satistics that customers are important and those organizations who measure them and make them an important component of their strategy seem to perform better (financially) than those who do not. This message is pervasive in all industries (at least those industries that I have either worked in or found on the web).
Thursday, March 27, 2008
A Loyalty Check List
I have written a number of blogs about metrics but most of them have been focused on the customer. I have also developed a rather comprehensive checklist that provides an in-depth assessment of a company's commitment to loyalty. I have included a simplified and reduced version of this assessment below. Please note that this checklist has a copyright; however, it can be used by anyone as long as the source is noted.
Dr. B’s CHECKLIST
To Assess Internal Loyalty Components in a Company
[Directions: respond to each statement using a rating of 0 = not at all; 1 = minimally; 2 = moderately;
3 = significantly]
I. CUSTOMERS
A. Identify homogeneous customer segments to determine the kind of customers to whom you can deliver superior value. ___
B. Understand your target customers and determine specifically how you will retain them. ___
C. Identify specifically which, where and how often customer expectations have
been met, exceeded, or not met. Remember, whatever the customer says is a
problem, is a problem! ___
D. Determine accurately your company’s ability and willingness to handle customer questions, inquiries and complaints effectively. Identify specific procedures for
each customer question. ___
E. Determine accurately the extent to which your recovery process reduces defections and/or retains customers whom might otherwise switch to the competition. ___
F. Identify the percentage of your customer base at risk. ___
G. Maintain programs to ensure customer retention throughout the product or
service lifecycle. ___
H. Establish specific vehicles and opportunities for multiple levels of interactive communication with your customers. ___
I. Articulate specific examples of how your company earns the personal trust,
respect and loyalty of each type of customer. ___
J. Assess the meaningful reciprocal loyalty between your company and your
customers. Identify specific ways in which each feels and demonstrates some
obligation to the other. ___
II. PRODUCTS and SERVICES
A. Identify specific new products and/or services based on your customers’ changing needs, desires and expectations. ___
B. Identify the process by which you anticipate evolving customer needs and
wishes through intelligence-gathering and analysis. ___
C. From your customer’s perspective, scrutinize your products and services to determine the gap between their expectations and experiences. ___
D. Specifically how do you keep customers actively involved throughout your
product or service lifecycle? ___
III. EMPLOYEES
A. Understand and can state clearly the share purpose between the company and
each employee. ___
B. Employees have integrated the company values and priorities into their work life. How do you know? ___
C. Ensure that management decisions and behaviors are congruent with the stated vision and goals of the company. ___
D. Design operating structures and incentives to empower front-line staff to take the initiative to serve and delight your customers. ___
E. Implement an effective retention strategy aligning employees’ enlightened self-interest with the company’s interests. ___
F. Ensure that every employee understands thoroughly their personal contribution, their role and responsibilities in the overall activities of the company. ___
G. Articulate specific examples of how the company earns the trust, respect
confidence of its employees. ___
IV. MEASUREMENT SYSTEMS
A. Track and understand the market and revenue impact of poor quality, customer problems and priorities. Determine the percentage of your customer base at risk then set priorities accordingly. ___
B. Determine the gap between what the customer expected and what the customer actually received. ___
C. Evaluate each critical incident with your customer and determine accurately the nature and extent of the problems where they occur. ___
D. Measure each priority area accurately and continuously. Review the results regularly with top management. ___
E. Identify core causes of defections rather than triggers. ___
E. Determine your company’s ability to handle customer complaints and inquiries effectively (recovery process). ___
F. What is the net present value of your customer base? ___
G. How much is a new customer worth? ___
H. How much is it worth to keep an existing customer? ___
I. Determine the actual payoff for problem prevention and resolution. ___
• Review your scores by section to determine categories of strength and/or weakness. If your average ratings overall fall within the two-to-three range, CONGRATULATIONS!
• If you have 6 or more of the 9 measurements scored at 2 or higher, CONGRATULATIONS!
• Otherwise, you may want to get more directly involved with specific problem areas.
Dr. B’s CHECKLIST
To Assess Internal Loyalty Components in a Company
[Directions: respond to each statement using a rating of 0 = not at all; 1 = minimally; 2 = moderately;
3 = significantly]
I. CUSTOMERS
A. Identify homogeneous customer segments to determine the kind of customers to whom you can deliver superior value. ___
B. Understand your target customers and determine specifically how you will retain them. ___
C. Identify specifically which, where and how often customer expectations have
been met, exceeded, or not met. Remember, whatever the customer says is a
problem, is a problem! ___
D. Determine accurately your company’s ability and willingness to handle customer questions, inquiries and complaints effectively. Identify specific procedures for
each customer question. ___
E. Determine accurately the extent to which your recovery process reduces defections and/or retains customers whom might otherwise switch to the competition. ___
F. Identify the percentage of your customer base at risk. ___
G. Maintain programs to ensure customer retention throughout the product or
service lifecycle. ___
H. Establish specific vehicles and opportunities for multiple levels of interactive communication with your customers. ___
I. Articulate specific examples of how your company earns the personal trust,
respect and loyalty of each type of customer. ___
J. Assess the meaningful reciprocal loyalty between your company and your
customers. Identify specific ways in which each feels and demonstrates some
obligation to the other. ___
II. PRODUCTS and SERVICES
A. Identify specific new products and/or services based on your customers’ changing needs, desires and expectations. ___
B. Identify the process by which you anticipate evolving customer needs and
wishes through intelligence-gathering and analysis. ___
C. From your customer’s perspective, scrutinize your products and services to determine the gap between their expectations and experiences. ___
D. Specifically how do you keep customers actively involved throughout your
product or service lifecycle? ___
III. EMPLOYEES
A. Understand and can state clearly the share purpose between the company and
each employee. ___
B. Employees have integrated the company values and priorities into their work life. How do you know? ___
C. Ensure that management decisions and behaviors are congruent with the stated vision and goals of the company. ___
D. Design operating structures and incentives to empower front-line staff to take the initiative to serve and delight your customers. ___
E. Implement an effective retention strategy aligning employees’ enlightened self-interest with the company’s interests. ___
F. Ensure that every employee understands thoroughly their personal contribution, their role and responsibilities in the overall activities of the company. ___
G. Articulate specific examples of how the company earns the trust, respect
confidence of its employees. ___
IV. MEASUREMENT SYSTEMS
A. Track and understand the market and revenue impact of poor quality, customer problems and priorities. Determine the percentage of your customer base at risk then set priorities accordingly. ___
B. Determine the gap between what the customer expected and what the customer actually received. ___
C. Evaluate each critical incident with your customer and determine accurately the nature and extent of the problems where they occur. ___
D. Measure each priority area accurately and continuously. Review the results regularly with top management. ___
E. Identify core causes of defections rather than triggers. ___
E. Determine your company’s ability to handle customer complaints and inquiries effectively (recovery process). ___
F. What is the net present value of your customer base? ___
G. How much is a new customer worth? ___
H. How much is it worth to keep an existing customer? ___
I. Determine the actual payoff for problem prevention and resolution. ___
• Review your scores by section to determine categories of strength and/or weakness. If your average ratings overall fall within the two-to-three range, CONGRATULATIONS!
• If you have 6 or more of the 9 measurements scored at 2 or higher, CONGRATULATIONS!
• Otherwise, you may want to get more directly involved with specific problem areas.
Wednesday, March 26, 2008
Metrics Are Important
I recently read an article by Neil Davey, the editor of MyCustomer.com and appreciated some of the points he made. In fact, some were so timely, I decided to incorporate them in this blog. First, the statistics which really have impact on our vision of what customer loyalty is all about. These statistics strongly suggest the need for a serious review of the metrics we are using.
1. Deloitte's 2007 study "in the Dark" seems to indicate that business leaders have an excellent idea of what traditional financial figures mean but are not clear what the customer information means. The statistics from the study show that 87% of companies are happy that their financial measurement is goodbut only 29% can say the same about non-financial indicators.
2. VisionEdge Marketing, a market research company, found in their 2007 study that 78% of companies in their study track leads to conversion but only about 25% track and measure the rate of customer acquisition and fewer than 10% measure customer lifetime value or customer advocacy.
The point of the article, and it is a very valid point, is that when we measure customer loyalty and customer satisfaction we are immediately ignoring the potential customer and the lost customer. Mr. Tom Mooney, consulting and propositions director at Experian Integrated marketing is quoted as saying "The nearest many organizations get is the use of customer satisfaction surveys and average call answering statistics - neither of which adequately measure customer experience."
The bottom line is well stated in the article; namely, companies need to focus on those metrics that aid in decision making and which will contribute to the bottom line of the financial statement. A secondary point made in the article is that the search for a single customer metric that holds the key to success for every company is a futile one. The author suggests that the metrics must include behavioral and experiential metrics along with the traditional metrics. He also suggests we expand our vision of "customer."
I believe that Neil Davey has made a good case for taking a closer look at the metrics companies are using. His point that not all metrics have value and one should be willing to eliminate those that have minimal or no impact on the performance of the company.
1. Deloitte's 2007 study "in the Dark" seems to indicate that business leaders have an excellent idea of what traditional financial figures mean but are not clear what the customer information means. The statistics from the study show that 87% of companies are happy that their financial measurement is goodbut only 29% can say the same about non-financial indicators.
2. VisionEdge Marketing, a market research company, found in their 2007 study that 78% of companies in their study track leads to conversion but only about 25% track and measure the rate of customer acquisition and fewer than 10% measure customer lifetime value or customer advocacy.
The point of the article, and it is a very valid point, is that when we measure customer loyalty and customer satisfaction we are immediately ignoring the potential customer and the lost customer. Mr. Tom Mooney, consulting and propositions director at Experian Integrated marketing is quoted as saying "The nearest many organizations get is the use of customer satisfaction surveys and average call answering statistics - neither of which adequately measure customer experience."
The bottom line is well stated in the article; namely, companies need to focus on those metrics that aid in decision making and which will contribute to the bottom line of the financial statement. A secondary point made in the article is that the search for a single customer metric that holds the key to success for every company is a futile one. The author suggests that the metrics must include behavioral and experiential metrics along with the traditional metrics. He also suggests we expand our vision of "customer."
I believe that Neil Davey has made a good case for taking a closer look at the metrics companies are using. His point that not all metrics have value and one should be willing to eliminate those that have minimal or no impact on the performance of the company.
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